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Your Turn: Price obligation

Several nights ago I was wandering through the local Kmart games section when I noticed someone looking to buy Bulletstorm for the Xbox 360. While they picked up the game and walked away to peruse other items I decided to check the price of the game myself - $49,99. After some quick interneting on my phone I was able to pull up a page on ozgameshop.com displaying Bulletstorm for $14.99 with free delivery.

At this point I was faced with a conundrum of whether to inform the person about a much cheaper version of the game, or let them purchase something at a price they were happy to pay. I generally don't like to intrude on the affairs of others so it was a rare moment that I actually informed this person about the price disparity.

This raises an interesting question for those people who are savvy about the ways of bargain hunting for games. Should those people actively inform retail shoppers about better deals elsewhere? This could be buying games from websites, either locally or internationally, or even going to another store that has the game at a cheaper price compared to the current store a potential customer is in.

Initially the answer to this question is very easy "yes, I'm going to save this person some money". But we, as bargain savvy people, possibly need to consider longer term issues that may arise from this.

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Mo money, mo money?

Recent sales data from NPD indicated that Australians spent $1.5 billion on games for "traditional retail" in 2011. This was a decline of 12.8% from the 2010 figure, and the reason for this decline is unclear. Anecdotally it seems that more people are acquiring their games from overseas websites due to the strong Australian dollar and the much cheaper prices, however how do you prove that this decline in money is from imports and not a reduction in spending due to the higher living costs everyone is incurring? If more people start importing games then ultimately that is money that leaves the Australian economy for good.

If Australia suddenly loses another $500 million (or even $1 billion) from the economy it would make a limited impact as a whole, yet it would turn a ripple into a wave in the games retail space. Especially for those retailers that are exclusively selling games or game related items.

Where the people gone?

If this level of income is removed from the economy the obvious follow on would be the reduction in bricks and mortar stores that could remain open. Non-exclusive stores such as JB Hi-Fi or Big W would possibly continue to sell games as they have other sources of income, but speciality stores would be severely impacted and may ultimately close down.

This would add to the level of hysteria in the media about companies shedding jobs and legitimately impact a lot of people in the retail sector. All because games are cheaper overseas and we spread the word to other people who just haven't figured this out.

While we can sympathise with individuals who would lose their jobs in this instance, it is hard to show any emotion to companies who continue to trade within Australia with outdated business models that fail to take into account global purchasing power. Even moves to combat the cheaper internet sales prices have a hint of desperation about them. Having constant "sale" signs plastered over shop fronts is a desperate act to remain relevant, and grey importing by some businesses has reduced on-shelf prices yet it is still cheaper to buy from overseas in almost all circumstances.

House of cards

The general consensus in relation to higher digital prices in Australia compared to the US is that publishers need to appease the brick and mortar retail stores and keep pricing consistent. If the ridiculous pricing structure for retail and digital pushes more sales away from Australia, retail based companies in this country will need to respond in a similar manner to Harvey Norman's Direct Import website. If they do, then this is a further impetus for gamers to import copies and further erode the sales made in this country.

This may be the point that the publisher/retailer house of cards fall over.

Retailers must make a move to claw back some of the overseas sales from customers, either through grey importing or selling direct from overseas themselves. Publishers selling direct through digital distribution in Australia would be forced to counter these cheaper prices, and effectively abandon any pretence of a protected partnership agreement with traditional stores.

It could actually herald some much needed competition in the price point of games in Australia, especially between physical and digital versions of the same product.

What to do?

The only thing that will force corporations to change their business pricing and distribution model is the power of money, as they will continue to milk a cash cow until it is no longer viable, but in doing so it could negatively impact business and people. So what do we do? Should consumers just go for the best price possible irrespective of the potential medium-to-long-term effects, or should we take those into consideration? Should we be voting with our money to try and force a chain reaction of events that may end up with better localised deals for us?

- Steve Smoothy

Screen Play readers can submit articles or ideas for consideration in Your Turn and Your Review using the email address screenplayblog@gmail.com. The best blog post published on Screen Play between March 1, 2012 and March 30, 2012, as judged by Jason Hill, will win a PlayStation 3 console from Sony Computer Entertainment. The PS3 has a 160GB hard drive and is worth $349. The next prize winner will be announced on March 30. Only Australian residents are eligible and the judge's decision is final.

14 comments so far

Although i tend to buy all games from Bricks and Mortar stores nit can be very tempting to buy games from overseas, even the Harvey Norman direct imports store has the occasional bargain. A good example is MGS HD collection, it is being sold in most stores for approx $79 whereas the HN direct imports site had it for $39, even if you add postage it is substantially cheaper. Makes for a hard decision indeed

Commenter

Gazza

Location

Sydney

Date and time

March 05, 2012, 9:25AM

Burn 'em all

Commenter

Charlie Miso

Location

Part of the Rebel Alliance and a tratior.

Date and time

March 05, 2012, 11:30AM

I read that Gerry Harvey isn't happy we didn't all flock to his walled garden with our wallets in our mouths and undies around our ankles

JB up until about two years ago was very competitive, their silly 3-for-1 deals notwithstanding. Now they are obviously struggling so the first thing they did was raise all the prices of the games and start flaunting console bundle deals.

Myer (none in NT) did away with games altogether.

WoW Sight and Sound is bankrupt.

This leaves two camps, the big two stores and the specialty stores. Games and anything related have and (for the forseeable future), will always be either loss leaders or marked up to ensure the local publishers/distributors get their pound of flesh.

Commenter

Leigh

Date and time

March 05, 2012, 11:36AM

Good read mate, liked it. Missed the issue however I reckon. Big problem for Australian retail is rent and wages. Plus a outdated business model of high margin. Rent and wages go up, prices go up to keep +30% margins and you have an overpriced product that can be sourced cheaper elsewhere.

Australians need to realise that it isn't their god given right to earn $100k per year working as a retail assistant etc (paint that across a lot of sectors, hospitality is another bad one...sorry mate, $35 per hour to clear tables?.....sod off).

The retail issue is structural which requires fixing from the ground up. Starting with a good old recession. Worked in the 90's, needs to happen again. We've gotten greedy and it's time for a smacking.

Commenter

Fyre

Location

Melbourne

Date and time

March 05, 2012, 11:57AM

I didn't want to go into "why" games are priced as they are in Australia. Higher cost of business and living dictates that they are at the moment, especially your point about the rental model. Agreed that this needs to change, but everyone likes money so I can't see it changing in general for all

The point I wanted to make was whether we should let them burn as consumers. If we continue to buy local then nothing will change, but if we buy from other sources then something has to change but should we consider the implications of this. From a personal point of view I want to save money, so I'm willing to let retail burn until they do something better to comete.

Commenter

Smoolander

Location

High above the city

Date and time

March 05, 2012, 12:22PM

The rent for retail space in Australia is just too damn high! Even for a small out of the way shop in a suburban shopping centre on the outskirts of Sydney for a month costs roughly the same as staffing it for 6 months.

Commenter

Blahzy

Location

Steam & XBL: Blahzy - PSN: Blahzy78

Date and time

March 06, 2012, 9:36AM

Great Article Smoo - this is something i think about a lot as I almost exclusively order my games from overseas(with the exception being largely from bargain bins). Recently, I've noticed a few brick&mortar stores stocking imported games at competitive prices (ie $65-70) which is slowly turning my attention

Commenter

AarghZombies

Date and time

March 05, 2012, 12:31PM

Where do you normally get your stuff from? I find zavvi has some ridiculous savings quite often on recently released games. Rayman Origins was about $20 for a long time very shortly after release.

I also picked up Dark Souls LE for about $35 a couple of months after release and RXHR for about $20. Crazy prices that I'm not sure Australian stores have any hope of matching.

Commenter

Smoolander

Location

High above the city

Date and time

March 05, 2012, 1:03PM

Whoops - i missed this question - i usually stick to PlayAsia mostly cause ive had really good experience with them. I shop around (Zavvi, Ozgameshop etc) if im looking to shave off some pennies but, generally, i haven't seen substantial differences in prices (sales come and go)

Commenter

AarghZombies

Date and time

March 08, 2012, 2:36PM

I think this article is very timely given what is happening in the UK. It seems almost inevitable now that the only specialist game retailer in the country will collapse. Perhaps the death of specialist games retaillers will happen a lot quicker than many of us ever thought.